Bitcoin and Solana decline as FTX plans to begin second wave of distributions
- FTX Recovery Trust announced plans to begin another round of distributions to creditors in May.
- The trust will distribute $5 billion to eligible creditors through BitGo or Kraken, which function as the distribution service providers.
- Following the announcement, Bitcoin and Solana declined by 0.5% and 4%, respectively.
Bitcoin (BTC) and Solana (SOL) saw a slight decline on Thursday, following an announcement from defunct crypto exchange FTX that it will commence its second wave of creditors’ distributions on May 30.
Bitcoin, Solana decline as FTX creditor distributions set to commence on May 30
Defunct crypto exchange FTX is set to begin its next round of creditor settlements in May, according to a press release on Thursday. The company revealed that, starting May 30, eligible creditors will partake in over $5 billion worth of distributions as part of its restructuring plan.
The second round of distributions will be directed to both Convenience and Non-Convenience class creditors who have completed the pre-distribution requirements by the start date.
In line with the FTX bankruptcy plan, Dotcom Customer Entitlement Claims will receive a 72% recovery, while US Customer Entitlement Claims are set to receive 54% in distributions.
General Unsecured Claims and Digital Asset Loan Claims will each receive a 61% distribution. Meanwhile, Convenience Claims are expected to receive a 120% refund.
John Ray, Plan Administrator of the FTX Recovery Trust, stated that this second leg of distributions reflects the company's commitment to "recovering more for creditors and resolving outstanding claims."
Eligible creditors will receive their funds via BitGo or Kraken, which currently function as the distribution service providers. The defunct company stated that when customers register with the service providers, they forfeit any claims to cash distributions.
FTX began its creditor distributions in February, following its collapse in late 2022. The initial recipients of the refunds were Convenience Class creditors with claims of $50,000 or less.
The crypto market has seen a slight decline since the announcement, with Bitcoin (BTC) dropping toward $103,000 at publication time. Solana (SOL) is also down nearly 4%, according to CoinGecko data. FTX unlocked 11.2 million SOL on March 1 to commence the initial distribution to creditors, which sent prices tumbling at the time.
The recent price decline could stem from investor concerns over the possible impact of the distributions on the crypto market.
Author
Michael Ebiekutan
FXStreet
With a deep passion for web3 technology, he's collaborated with industry-leading brands like Mara, ITAK, and FXStreet in delivering groundbreaking reports on web3's transformative potential across diverse sectors. In addi
